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Fly News Breaks for January 16, 2020
XPO
Jan 16, 2020 | 08:38 EDT
Morgan Stanley analyst Ravi Shanker said the mathematical logic for XPO Logistics exploring strategic alternatives "seems clear," but he believes the "strategic logic is a bit harder to understand" given the wide range of outcomes, potential that XPO could be stuck with businesses that the market may view to be "damaged" or unsellable, and a lack of clarity on the dis-synergies of scale that might exist. If XPO manages to divest all its non-core businesses, it could end up being the industry's second-best less-than-truckload shipper with an excellent balance sheet, said Shanker. However, he asks, "is a +30% base case upside enough for a potential outcome that breaks up the company and ends XPO as we know it?" He keeps an Equal Weight rating and $81 price target on XPO shares, which are up $16.00, or 19.3%, to $98.80 in pre-market trading.